Michigan already is one of the top research and development centers in the country, but the state will need more highly trained engineers and programmers to keep up with the increased demand from an ever-evolving automotive industry.

Speaking at the Washtenaw County Economic Outlook Luncheon on Wednesday, economists George Fulton and Sean McAlinden said that while manufacturing is returning to Southeast Michigan, greater gains are being made in the development and creation of automotive components than in the heavy manufacturing that was once a central component of the local economy.

“Michigan has 65,000 automotive engineers working at 360 technical centers and is the largest industrial R&D center in the United States outside California,” said McAlinden, executive vice president for research and chief economist at the Ann Arbor-based Center for Automotive Research, said.

The economists agreed that these knowledge-based jobs are the future of the economy for the region and that while many positions are filled, there is room for a lot more talent to come to the area.

“For every engineer with at least five years of experience, there are three or four job openings right now,” McAlinden said.

“Some engineers right out of school have had some difficulty because companies are hesitant to train new hires in case they are then hired away by competitors for just a few thousand dollars more, but I think that’s going to go away soon and you’ll see an increase in entry level positions being hired.”

The one area where the auto industry is outpacing the talent supply available in Michigan by a wide margin is software developers. According to McAlinden’s presentation, Michigan is not a top 10 state in terms of the density of software developers and programmers.

“When we talk about this kind of talent we always say Ann Arbor is where that is,” he said. “Well, we need even more now, even Ann Arbor isn’t enough of that.”

The increase in engineering and design jobs helped support one of the primary theses in Fulton’s presentation, that future job growth in Washtenaw County will be driven by “high-wage” jobs. Fulton, director of the Center for Labor Market Research at the University of Michigan, predicts that over the next three years, jobs with annual wages higher than $62,000 will grow by 8.5 percent, far and away the highest gaining sector in the local economy.

Both agreed, however, that the increase in available jobs will have to be met by an increase in talent which means more university graduates choosing to remain in the area or the retraining of older unemployed residents.

While the number of Washtenaw County jobs in automobile manufacturing has dropped from a peak of 19,120 in 1990 to just 4,656 today, the industry is still a major factor in the economic health of the region.

“The high unemployment, the housing crash, everything that happened in 2008 and 2009, those were body shots,” McAlinden said in an interview. “They were reminders to the county that ‘you’re still in Michigan.’”

In delivering his 28th economic forecast for Washtenaw County, George Fulton said "it's been another good year."

Courtney Sacco | AnnArbor.com

Fulton said that while Washtenaw County’s economy is tied into the state’s it has recovered from the economic downturn at a much faster pace than much of the rest of Michigan.

“Washtenaw County (and Livingston County) will replenish all of the jobs lost from the recession by 2013,” he said. “That’s a big deal to people outside the area because they are still really struggling.”

Fulton attributed the recovery to the county’s relatively diverse economy and said that the gains were spread across most major sectors, especially private sector service providing.

“It’s better to see the whole economy improving slightly more gradually than to have it dominated by a couple of industries that are really taking off while others still struggle,” he said in an interview.

Just as the automotive recovery has helped the local economy regain its footing, the recovery of the residential real estate market has in turn come full circle and has helped the recovery the automotive industry, the economists said.

Fulton saw the increase in home construction as a sign that the housing market is tight and that prices are increasing. For McAlinden, the upswing means that customers have higher net worth and that construction workers need new trucks.

“We saw a 10.7 percent increase in light truck sales, much of that being pickup trucks as construction of new homes has increased,” he said.

“ And when you sell a driveway, we sell some cars. Especially when there’s a garage behind it.”
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2

Comments

Greg

Sat, Mar 30, 2013 : 1:50 p.m.

Just keep raising the price of college each and every year, regardless of how the rest of the economy is going. You will price out many students that would have been able if they could afford it.
From reports of this &quot;newpaper&quot; and many others, the level of debt and price of college has ballooned over the last decades and keeps going up. This is reality. Guess the professors and administrators need more starbucks.

ahi

Thu, Mar 28, 2013 : 1:49 p.m.

They will have to pay for it. I make more on part time remote contract jobs than I can make working a fulltime local job.

JBK

Thu, Mar 28, 2013 : 12:51 a.m.

I was at GM for roughly 5 years as a consultant managing their LDAP &amp; Active Directory environment. The posters are dead on when they talk about cheap labor. GM would bring in 100's of Engineers and Programmers from China and India on H1Bs and pay these guys peanuts. What people do not realize is that when someone comes here on a H1B, they need a corp sponsor. They are not free to shop around, so once they get here, it is slave labor. In the mid 2000's we were all making 6 figures and the H1Bs were locked in at around 40k a year. They shared a one bedroom apartment with 5 other H1Bs. It was pathetic. It reminded us of the garment district in NY. what a joke.

Basic Bob

Thu, Mar 28, 2013 : 1:42 p.m.

H1-B visas are abused by those companies who can't distinguish competency or reward excellence. They measure progress by the amount of time spent on a project, so hiring a large number of unqualified &quot;engineers&quot; with limited technical skills and mastery of the English language and culture seems like a great choice. Alternatively, they could have hired competent US citizens to perform the work and it would have been done cheaper and faster.
But that would require real management skills which are sorely lacking in many organizations.

mr_annarbor

Thu, Mar 28, 2013 : 1:16 p.m.

Whether or not they were sending money home is beside the point. The point is that all this talk about needing more engineers is only half the story. Companies are using H1B visas to artificially depress salaries. I stand by my statement that if they were willing to pay engineers better, they would have more than enough.

Silly Sally

Thu, Mar 28, 2013 : 3:46 a.m.

Why would they need to &quot;share a one bedroom apt&quot; and with 5 people to boot? One person can afford a one bedroom apartment on $40k a year. 5 times $40 is $200,000 Something is wrong with your tall tale!
Whule they may have been paid less, they might have shared the apartment to send money back home. tell the entire story, please.

cibachrome

Thu, Mar 28, 2013 : 12:41 a.m.

A useful rule of thumb is that you start out making your age *2000 per year and end up at $3000 times your age. And that's just for product engineers. Then add some bennies (vacation, health care, IRA contributions and company wheels or extra disconts. There are often global travel and global assignment options, too.
Obviously, some dogs aren't up on the industry. Your Art History degree is only useful at UofM as a Twitter Tweeter. Your forgot to ask me if I wanted fries with that...

Usual Suspect

Thu, Mar 28, 2013 : 12:34 a.m.

What is meant by, &quot;new-look auto industry?&quot;

JBK

Thu, Mar 28, 2013 : 12:46 a.m.

I will take a guess and suggest &quot;right sized&quot;, &quot;slimmed down&quot;, etc.. I think it is a futile attempt at referencing the financial trouble GM and Chrysler went thru, only to have Big Brother come in and close dealerships, lay people off, etc... Ford even went thru some of this though they did voluntarily and not from a mandate!

trespass

Wed, Mar 27, 2013 : 9:27 p.m.

47% of all of the PhD's in engineering given each year in the US go to foreign citizens. The largest number from China. UM is no exception. The University says that there are not enough qualified American applicants but they also testified in a recent trial that the grade point average for the engineering PhD program has gone up from a B- to a B+. Thus, a B student used to be &quot;qualified&quot; but because of the influx of foreign citizens, they are no longer considered &quot;qualified&quot;.
Governor Snyder's solution is to go to Washington, DC and lobby for more visas for foreign engineers. That might have something to do with his investment in a Chinese company name Neophotonics.
Let UM serve the State of Michigan by training more American engineers.

Lizzy Alfs

Wed, Mar 27, 2013 : 8:27 p.m.

For anyone who is interested, you can download a PDF of the full report here:
http://www.annarbor.com/business-review/view-the-full-2013-2015-economic-outlook-report-for-washtenaw-county/

Mr. Gustav

Wed, Mar 27, 2013 : 8:16 p.m.

Salary surveys show that computer programmers earn much, much more than $35k/year ... In my experience hiring recent grads from UMich (for an Ann Arbor company), the going salary is about double that, and most certainly more for experienced folks. It is great news that local industry has openings for programmers, even newbies straight out of school. These are great jobs and I'm thrilled they are staying in SE Michigan.

JBK

Thu, Mar 28, 2013 : 1:52 a.m.

dogface - Not sure Craigs is the place to go for this. Dice.com is much more technical. The website is exclusively for IT &amp; Engineering........:)

dogface

Wed, Mar 27, 2013 : 11:58 p.m.

A quick check of craigs list for engineers showed four jobs out of 100 in ann arbor. they all required 5-10 years of experience! pay was &gt;$70k. give us a link to your survey!

barefootdave

Wed, Mar 27, 2013 : 10:33 p.m.

70K a year to start sounds fair as long as your still allowed a life. Work hard, prove yourself put in time and get promotions. The 100K loan is another issue all together. Thats an outrageous number for a state school.

UloveM

Wed, Mar 27, 2013 : 8:52 p.m.

The UM grads still leave MI for CA, because they are offered 4 times of $35k/year and a snow free winter.

dogface

Wed, Mar 27, 2013 : 7:42 p.m.

so lets put these hi tech graduates $100K in debt for student loans and then pay them $35k/yr--slaves to the banks for life! But Big Three profits rise!

mr_annarbor

Wed, Mar 27, 2013 : 7:42 p.m.

It's been my experience that industry always says that it needs more engineers and programmers, when what they really mean to say is that they need more engineers and programmers who are willing to work cheap. Pay a high enough wage, and you'll have people flocking here. Seriously.

GoNavy

Thu, Mar 28, 2013 : 11:38 a.m.

Spot-on. This nation has plenty of unemployed engineers and programmers. When I see the unemployment rate for these professions hovering around 1%, then I'll listen to cries for more. Until then, you have hit the nail on the head: Business doesn't want these professionals (complete with &quot;families&quot; and &quot;needs&quot;) - they want college graduates who will put in 60-80 hours a week at entry-level wages.

Angry Moderate

Thu, Mar 28, 2013 : 1:13 a.m.

JBK, large companies constantly lobby Congress to approve more H1-Bs. The number gets increased all the time, often for Indian programmers.

JBK

Thu, Mar 28, 2013 : 12:55 a.m.

Angry - H1Bs are capped by Congress. Whether it be Nursing, Engineers, Programmers, etc..., there is a ceiling. Once that ceiling is hit, no more H1Bs. :)

Angry Moderate

Wed, Mar 27, 2013 : 9:52 p.m.

Exactly. They say there's a shortage so they can get more H1-B visas approved.